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CORRECTED-UPDATE 1-Brookfield-led group to buy $5.2 bln Petrobras unit -source

Published 2016-09-06, 01:30 p/m
© Reuters.  CORRECTED-UPDATE 1-Brookfield-led group to buy $5.2 bln Petrobras unit -source
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(Corrects amount of assets sold by Petrobras so far this year to $3.9 billion instead of $1.4 billion, corrects target date for achieving $15.1 billion in total divestments to end of this year instead of end of next year, paragraph 10)

By Tatiana Bautzer

SAO PAULO, Sept 6 (Reuters) - Brazil's state-run oil company Petroleo Brasileiro SA PETR4.SA PBR.N agreed to sell 90 percent of its natural gas pipeline unit to a group of investors led by Canada's Brookfield Asset Management Inc BAMa.TO for $5.2 billion, a source with direct knowledge of the deal said on Tuesday.

The investor group includes British Columbia's pension fund and Chinese and Singaporean sovereign wealth funds CIC CIC.UL and GIC GIC.UL . The preliminary agreement will be submitted to the companies' boards and the transaction is expected to close in late September, said the source.

Brazil's state oil company, known as Petrobras, declined to comment on the matter, and Brookfield also declined to comment.

The deal will be the largest divestment so far in the heavily indebted oil company's $15 billion asset sale plan.

Reuters reported on May 11 that Brookfield had entered exclusive talks to acquire Nova Transportadora do Sudeste SA, or NTS as the Petrobras subsidiary is informally known. The exclusivity period expired on Aug. 12. talks took longer than expected because the parties and their financial and legal advisers had to agree on terms of new contracts establishing the commercial relationship between Petrobras and NTS, according to the first source and two other people with direct knowledge of the matter. All three asked not to be identified because they are not authorized to discuss the matter publicly.

During the exclusive talks, the investor group led by Brookfield raised the stake it was offering to acquire in NTS to 90 percent from 82 percent.

The investment banking unit of Banco Santander (MC:SAN) Brasil SA SANB11.SA advised Petrobras on the deal.

The sale should give a boost to downsizing efforts at Petrobras, which hinge on divestments to cut the largest debt burden of any global oil firm, at around $130 billion.

So far this year, Petrobras had sold $3.9 billion in assets, of a total $15.1 billion target for divestments expected by the end of this year.

NTS has nearly 1,560 miles (2,511 km) of pipelines in southeast Brazil. (Editing by Jeffrey Benkoe and Matthew Lewis)

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